August rate cut may have been the last

The chance of the Reserve Bank cutting its official interest rate heading into Christmas is virtually non-existent.

Financial markets see only the slimmest of risks of the cash rate going down any further, having stood at a record low 1.5 per cent since August.

When members of the central bank board meet for the last time this year on Tuesday, they are more likely to be concerned about the risks facing the Australian economy in 2017 rather than the need for further tweaking of monetary policy in the short-term.

Last week the Organisation for Economic Cooperation and Development predicted the Reserve Bank would be raising the cash rate by the end of 2017, in line with developments among other central banks.

For example, there is growing speculation the US Federal Reserve will raise its key rate this month, fuelled by figures on Friday showing the US jobless rate dropping to 4.6 per cent, the lowest in over nine years.

Timo Henckel, a lecturer at the Australian National University's Research School of Economics, believes while the Australian unemployment rates sticks at 5.6 per cent and inflation remains contained there is no need for the Reserve Bank to change rates.

"But the probabilities for a required interest rate increase have strengthened on all horizons," Dr Henckel says.

He chairs the ANU's so-called "RBA shadow board" made up of academics, economists and former RBA board members.

It sees the probability for the need for an interest rate rise in the next six months rising to 71 per cent, up from 63 per cent a month earlier.

Last week's decision by the Organisation of the Petroleum Exporting Countires to agree to production cuts will lift oil prices and point to an uptick in global inflation.

"Eventually, this pressure is likely to spill into the domestic economy," Dr Henckel says.

The rise in yields, or interest rates, on global government bonds since the US presidential election of Donald Trump on the expectation of an expansive push in the world's largest economy and potential inflation pressures has already had a knock-on impact Down Under.

Australian banks have started raising rates on their fixed-term mortgages, which are derived from the action of bond markets.

"Fixed rates are based on market expectations of future rates and are the best indicator that we've got that a variable rate hike is on the way," RateCity.com.au director Peter Arnold says.

"Previously, banks were betting on lower rates in the future but we're seeing those expectations change by the day."

Whether that view remains after Wednesday's national accounts for the September quarter remains to be seen.

Economists are concerned the recent run of quarterly data - weak retail spending, construction and business investment - points to a subdued economic growth result, possibly even a decline.

Economists will finalise their GDP predictions after a series of data for business profits and inventories, international trade and government spending over Monday and Tuesday.